Parnell criticizes complexity of new Senate oil tax proposal

Governor likens proposed tax to 'calculus' versus current 'algebra'

Gov. Sean Parnell gave his first, somewhat preliminary, reaction to a new oil tax bill introduced by the Senate Finance Committee on Tuesday.

The governor’s comments at the Native Issues Forum were somewhat critical, but were also somewhat hopeful an agreement could be reached.

Parnell’s own bill offering the state’s oil producers much more dramatic tax cuts has stalled in the Senate, but its powerful Finance Committee on Tuesday put forward a new version of Senate Bill 192, offering much bigger cuts than did a previous version.

The new version is not just a tax cut, but it is also a significant change in how taxes are calculated, said Sen. Bert Stedman, R-Sitka, who proposed it.

Parnell said it might be too complicated.

“It takes what is already a complex tax regime and makes it more complex,” he said.

He likened the change to going from algebra to calculus to figure Alaska’s oil taxes.

Cautioning the latest version was still being reviewed, Parnell said it would increase taxes at less than $60 per barrel, hold taxes steady between $60 and $100 and reduce them “only a little bit” above $100 barrel.

Alaska needs to offer oil companies a better deal than Texas or North Dakota to attract investments, but Parnell said he thought a deal would be reached.

“I’m still very hopeful that we can work out an accommodation or a compromise with the Senate,” he said.

There are 11 days left for Parnell to come to an agreement with the House of Representatives and the Senate, he said, and that can be done.